Details are sketchy on the planned Yahoo-Google “nonexclusive advertising services agreement,” but it will have far-reaching ramifications for both PPC (define) search advertisers and publishers.
It’s exact impact is difficult to predict, but we can formulate some hypotheses based on what we know about differences between Yahoo’s Panama and Google’s AdSense/AdWords systems. Watch how exactly the Yahoo system will decide whether to run advertising from Google, Yahoo Panama, or an alternate source (presumably Microsoft).
For example, will entire keyword/keyword phrase combinations be assigned to Google ads or will the system dedupe and commingle ads from several auction systems? Will Google advertisers have the option of bidding more or less for Yahoo traffic in the same way we have the option of bidding separately for Google content advertising? Will the redirects preserve the HTTP referrer, allowing the better analytics and campaign management systems to distinguish a click from Google or its other network partners from a Yahoo-originated click? The list goes on.
If you spend more than $5,000 a month on PPC search, you should have accounts set up at all three major search engines. However, data indicate that many more of you have Google accounts than Yahoo or Microsoft AdCenter accounts.
For the purposes of analysis, let’s assume you have accounts in all three engines and that you manage your campaign to an optimal ROI (define) mix across engines. Due to the lower level of competition and perhaps due to differences in audience makeup (and therefore conversion rate), you may be bidding less on the same click from Panama than from AdWords. In this instance, it’s easy to see why, more often than not, Google’s higher-priced ad would be selected by Yahoo’s system, particularly if your bid price is 20 percent higher or more, as the revenue share is rumored to be approximately 80/20. Since Yahoo will presumably get about $0.80 on the dollar, a gap in bid price for an identical ad would be required to trigger a Google ad.
In reality, Google may still get an opportunity to serve a huge chunk of advertising, even if your bid prices and ads are identical across campaigns. Google has done a far better job matching ads to search queries, particularly when the search query is three words or longer. Many Wall Street analysts estimate the lift in monetization due to Google’s broader advertiser base and better targeting technology to bring in 60 percent to 100 percent more revenue per search than Yahoo’s. If all these higher monetizing queries go to Google, that’s a huge chunk of search volume, particularly given that more sophisticated searchers often use longer queries to trigger the Google ads.
Part of the reason Google can match better is that it has three match types (along with negative match) and a much larger volume. Plus marketers have spent more time tuning campaigns to have the right mix of broad, phrase, and exact match for Google. Yahoo’s Advanced match type is notorious for its ability to deliver clicks against everything but the kitchen sink. While perhaps not that bad, it certainly takes a huge level of work to get Advanced Match to deliver a sufficient level of click quality. To get around this problem, advertisers and their agencies often opt instead to continuously build out campaigns in Standard match within Yahoo and deal only with Match Driver (another way Yahoo adds in synonyms).
A larger number of advertisers at Google, plus better geotargeting technology and more precision also means Google can provide better coverage for the high percentage of local search queries that advertisers may not have opted to use for Yahoo because of the blunt level of its geotargeting.
It’s easy to see a scenario where sometime in the next year Yahoo can’t justify keeping Panama turned on at all. Many analysts and industry pundits believe that the only reason Yahoo is proposing this open auction system is to appease regulators and improve the odds of getting regulatory approval.
Search marketers and advertisers aren’t the only ones likely to see the impact if and when this system goes live. Publishers also have reason to worry if Google picks up a greater market share because publishers will be subject to reductions in their revenue share. Google clearly could drop revenue share percentages dramatically and still monetize better than the alternative if there are few or no alternatives. This holds for search and contextual advertisers in particular.
This is a deal worth watching.
In other news, Microsoft bought digital television advertising technology company Navic Networks. Microsoft may have decided that for the time being digital ad opportunities lie not only within search but also beyond search.
I’d like to mention that the full deck of SEMPO research is now available for SEMPO members. So if you’ve been sitting on the fence trying to decide whether to become a member, now might be a good time, irrespective of what level you join at. If the SEMPO research gives you one great insight, helps you win a pitch, or helps you influence an existing client to spend more on your services (or media), your membership fee will be well worth it. Of course, given my personal history with SEMPO and the fact that I remain on the board of directors, I think SEM (define) professionals should join not simply for clearly positive economic reasons but also because they support the industry.
Some highlights of the SEMPO survey full deck (all 123 slides) are coverage of budget setting, campaign objectives, resource allocation, spending trends, and even some impure-search areas, such as mobile and behavioral. It’s a good read.
“You cannot succeed in analytics and marketing unless they are central to business operations and are helping business answer the questions that will drive dollars to the top or bottom line,” says Kerem Tomak, Sears Chief Digital Marketing & Analytics Officer.
Google sparked a small firestorm last week as reports surfaced that its intelligent assistant device Google Home delivered an unsolicited advertisement to unsuspecting owners.
On February 28, 2017, ClickZ presented the webinar 'Still using .com? Here’s why 50% of all Fortune 500 companies are about to use .brand' in association with Neustar.
In part one a few weeks ago, we discussed what brand TLDs (top level domains) are, which brands are applying for them and why they might be important. Today, we’ll take an in-depth look at the potential benefits for brands, and explore the challenges brand TLDs could help solve.